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Stock markets across Asia were trading lower on 26 January. Shanghai Composite bore the brunt, closing 6.4% down with China's stocks declining to its 13 month lows. Major exchanges Nikkei 225, Kospi, and Hang Seng all posted losses, as did most other regional markets.
This followed decline in oil prices to below $30 (£21, €28) a barrel on oversupply fears that were triggered after Iraq's oil ministry told Reuters that the country's oil output in December 2015 was a record. Certain oil fields had produced as many as 4.13 million barrels a day.
The Shanghai Composite dropped 6.4% and closed at 2,749.79. Japan's Nikkei 225 slipped 2.4% to 16,708.90. South Korea's Kospi declined 1.2% to 1,871.69. Hong Kong's Hang Seng dropped 2.5% at 18,863.64.
The declining oil prices also had a negative impact on Wall Street and the FTSE which closed lower overnight. While the Dow Jones Industrial Average closed lower by 1.29% at 15,885.22, London's FTSE 100 declined by 0.39% to close at 5,877.00 on 25 January.
Tatsushi Maeno, managing director at PineBridge Investments, said: "Wherever you look - China, oil and the US, there is no clear evidence of improvement in economic fundamentals. So in the near term, it is hard to expect risk asset prices to gain further after a spate of short-covering."
Australia's S&P/ASX 200 and India's CNX Nifty did not trade for the day because of public holidays in the region. While Australia is celebrating 'Australia Day', India is celebrating 'Republic Day'
This week, investors will look forward to monetary decisions by the US Federal Reserve at its two-day policy meeting, which is expected to be wrapped up tomorrow (27 January), and also the Bank of Japan's policy decision on Friday (29 January) over its stimulus programme.
Investors would also look forward to the monetary easing that Mario Draghi, President of the European Central Bank, hinted on 21 January. He had said that the central bank would review its stance on monetary policy in March 2016 because of declining growth and inflation prospects.
Oil prices which were under pressure after international sanctions against Iran ended were trading lower today (26 January). While WTI crude oil was trading down 2.47% at $29.59 a barrel, Brent crude was down 2.13% at $29.85 a barrel at 5:26am GMT.